It’s an illness that many of us share and it’s running rampant in this industry.
Thousands of smart people are drawn to this industry to change the lives of their clients and build a great business along the way. And things are good. Until they aren’t.
These advisors are the victim of a wide-spread but little understood disease called “I’m trying so hard to add value for all of my clients that it has me spinning out of control to the point where I don’t seem to be adding enough value to anyone.” OK, it’s a long name for a disease but you get the point.
I love symmetry but the irony in this situation is unbearable. You want to help your clients, to support them, to communicate, and to help them reach their goals. In your effort to help everyone, you limit your ability to help anyone. It impacts your clients, your business and your own state of mind.
If this sounds at all like you, you’ve run smack into something I call The Law of Diffusion.
The Law of Diffusion
If you’re like most advisors, a quick scan of your client base will uncover a rather heterogeneous group. You may have set a revenue or asset minimum, but your clients’ needs are likely to be diverse simply because of who they are. You might work with some business owners, a few doctors, an engineer or two, a number of corporate executives and a large number of folks who’ve already retired. The only obvious thing they have in common is working with you so life looks a little like this:
You sit at the center of this diverse group with the singular goal of adding significant value for everyone. As a result of that laudable goal, you’re virtually pulled in a hundred directions, honestly and genuinely trying to do the right thing.
What if, instead, all of your energies were focused on finding solutions for—adding value to—the lives of clients who had similar needs and aspirations? What would that mean for your clients and your level of efficiency? And what would it mean to your own level of fulfillment? Life could look a little like this.
Delivering on an extraordinary client experience means you know and understand the problems, lives and challenges of your clients better than anyone else. The reality is, however, that diverse needs diffuse your effort. By trying to engage everyone, you engage no one. And while that won’t necessarily lead to client dissatisfaction, it may limit your chances for true client engagement.
The other clear impact of the Law of Diffusion is that it’s harder to differentiate yourself. By trying to please everyone you’ll end up tending toward the mean and delivering a level of service that is technically right for everyone, but ultimately watered down.
However, when you’ve built a business around the needs of a clearly defined target audience, you become a magnet for the right clients. You’re clearly differentiated from everyone else, so the right clients find you and this drives growth.
Imagine, for example, that a prospective entrepreneur client has been referred to two different advisors. He or she jumps online to get to know the firms before reaching out. Both are credible, reputable firms and both provide the services that the prospect would need.
- The prospect goes first to LinkedIn to find profiles for the two advisors. They both list the professional associations with which they work, but one also lists membership in “The Startup Specialists Group—an Online Network for Entrepreneurs” as well as “Startups and Bright Ideas for Entrepreneurs.”
- Next the prospect goes to Facebook and finds corporate pages for both advisors. Both share information about their businesses and team, but one includes links to the 10 best Facebook pages for entrepreneurs.
- Finally, the prospect goes to the websites, each of which is well-designed and has information on the services the advisor provides. On the homepage of one, the advisor talks about helping clients build and transfer wealth and on the other it talks about the connection that entrepreneurs have between their businesses and their lives and the ways in which that creates unique challenges when it comes to planning for retirement. As an entrepreneur that prospect feels like they’re home on the second site and everything he or she read and saw led to that point as if drawn there by a magnet.
As an aside, while this example is about having a defined ‘target market’, that doesn’t work for everyone. A well-defined niche can be built around the work you do or the problems you solve for clients (e.g., legacy planning). You’re likely drawn to one or the other.
There’s another, less obvious, but critically important impact of the Law of Diffusion. It sucks the energy out of you.
It’s clear that you are the greatest catalyst for growth in your business. The problem is, you’re human. If you feel passionate about the target and the offer, it will provide the motivation that you need every day to keep things moving. When you don’t feel like you can do enough to fully support your clients and when you feel pulled in too many directions, that motivation will wane. And no growth tactic will be good enough to counteract the impact of low motivation.
The antidote for this epidemic is no surprise – a more clearly defined niche or ideal client, one that energizes and inspires you and provides direction to all of your communications. You may choose to work with a defined target market or you may have defined a niche based on the work that you do. Either can be effective because either gives you a clear focus, each and every day. My only caveat is that your niche needs to be authentic and I write more about that here.
Many advisors I speak to argue strenuously against the need for a more defined niche market. The Law of Diffusion simply makes it clear that it’s your clients that may be suffering if you don’t go down that road.
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